tv The Willis Report FOX Business December 28, 2012 9:00pm-10:00pm EST
gerri: hello, everybody, president obama calling on congress just moments ago askng to avoid the fiscal cliff. he said he is moderately optimistic that a deal could be done by december 31. congressional leaders are working on crafting a bill. certainly no grand bargain here that would improve entitlements. if they can't get a deal, the president has told harry reid to put the white house proposals up for an up or down vote. the details just keep on coming out. with us now are two guests. first, we are going to go rich edson. he is here with the very latest. tell us what you made of the president's comments. he was very direct. reporter: he was. and now heasses on to the senate.
senate majity leader harry reid, senate minority leader mitch mcconnell. they are trying to come up with something that can pass the house and the senate. the president laid out a proposal earlier this evening. at the beginning of this meeting. $250,000 per year. that income would be shielded from tax increases, and now he wants an extension of unemployment insurance. that is something that essentially a nontarter in a republican-controlled house. now he is leaving it up to the two leaders in the u.s. senate try to reach a compromise. something perhaps along the line of what is being negotiated between the speaker and the president a couple of weeks ago. perhaps a tax increase for amounts of more than $400,000 or $500,000 per year. also, senate leaders want to include something on the estate tax, according to a white house official. we'll can also be key to this is that the white house officials are also telling fox news and ed henry that it appears as though
the debt ceiling is not part of that. this is a huge nonstarter for republicans in the house. they want any dollar and increase of the debt ceiling to also involve a dollar in cuts over 10 years. if they don't have those corresponding cuts, it is unlikely that many of them will vote for an increase in the debt ceiling. removing them from the equation helps pave the way, at least for what will really be described as a stopgap proposal, one to avoid the full impact of the fiscal cliff. it will allow congress to again take another crack at finding some way to deal with spending cuts and tax reform. gerri: stay with us, rich edson. thank you so much for that report. turning now to our guests. it's up to harry reid and mitch mcconnell, the two leaders in the senate. trying to craft something. how likely is it that there would be a bill that passed the
senate and house? after all, that is the problem we have had a long. >> well, first, we have not seen any details of this package. we are talking completely off-the-cuff, but we know will not be at 250. i think carrie reed has problems from new york like dianne feinstein of california, and 250 will be a big pill to swallow. this is a fiscal cliff that we can have 50 days, 60 days down the road. it does not fix the problem if you will have these taxes on $250,000 and above. as rich edson said, this is going to be another deadline in congress has to have. i think everyone needs to get comfortable with the fact that we are going to have these kinds of stopgap last-second deals.
gerri: okay, let's get tyler in here too, are republican strategist. is there any common ground can be found here? i mean, this seems to me like a last-ditch effort. let me tell you what it when it was announced today that there was going to be a meeting at 3:00 o'clock from expectations went through the roof. i think people thought something really big was gng to happen at the end of the day. the president is saying that he is modestly optimistic. maybe you would be something by december 31. what do you make of it? >> he is modestly optimistic about no new changes here. you know, the country needs a leader. no matter what party you are from, that is what we need. that's what we need in the president of the united states, and we we have a president that gets a bunch of people together and says let's talk about the problem. instead, he just shovels the problem over to harry reid and said, figure this out with the republicans. we are going to find harry reid
and mitch mcconnell are really going to be able to come up with legislation that either can really pass. and then we go over the fiscal cliff and i agree that it just kicks the can a little bit further. part of the problem is we have no leadership here. gerri: let's get rich edson back into this. my next question is, what happens next? do we just wait for harry reid and mitch mcconnell to come up with something? when might we have more of these meetings? reporter: senate leaders will meet tonight. carrie reeder says he is suspending regular business on the senate floor tomorrow so leadership can work on us. they are working on issues and have been for the last couple of days. at that point, sometime sunday morning, they will have to make a decision as whether they got enough votes for they have come up with something that can actually pass the house and the senate. if that's the deal and they do reach some kind of skeleton or
compromise that they can sell the democrats and republicans in the house and senate, they will begin that process once leadership is signed off. the time from then it's a little bit longer when you consider that the house has a rule that any bill must be posted online, it must be public for three days. the senate has a number of procedural hurdles. the senate is strange. you can get something done in unanimous consent, while, floor, walk off and its past -- or you can deal with 3.5 days of parliamentary procedure. it is unclear as to how far that could tke. gerri: we don't have the reduced. >> we do not. at this point, we are likely going to surpass the years deadline. gerri: you can see the pictures of the house right now, people are talking to each other and trying to figure out what to do. i don't think i have ever seen anything like this. i have to tell you that i have
covered the markets, i have covered the economy for a long time. the kind of thing that we are seeing here, this last-minute, stopgap effort to try to get something done reminds me of something that the president said in his press conference. he said that outside of washington, people do not seem to understand why this is a repeat problem. that is that congress can't make a decision. and that regular people meet their deadlines. are you confident that we can get something done here? do you think that december 31, will come and go when we will have nothing in hand? >> look, i think the prsident and his sanctimonious lecture that he wants to give congress about not doing his job -- he needs to premiere on himself as well. he knows that there could be a deal. if he puts them on the table, whetr it is eligibility age for medicare, something that will fundamentally reform
medicare, the poor, he would get a deal -- enough votes to pass something easily. and he had some real fundamental spending cuts. the problem is the tax increases happen immediately. the spending cuts take it down, and they never end up happening. that has always been a bear trap that republicans have gone ourselves in. i don't think they are going to fall foor. i don't think anyone will remember mr. mccaul or john boehner's name 10 years from now. the true fact is that they really do want to build a fiscal cliff. they want this revenue is. gerri: to that point, americans will see the impact of this beginning wi their first paycheck in january. because social security payroll tax will go back up. we will see the changes coming on immediately. the average american family will pay $3500 each and every year in
taxes. that is the people in the middle class. tyler, quickly to you. you know, do you think that republicans are when the case here? you think of the senate, that they would be able to come up with a compromise? >> going over the cliff is the best scenario for republicans. it's not the best scenario for the country. at least if we go over the cliff, anything they agree to look for tax cuts. and i think that could be the scenario that we are looking for. everything that has been done for the past several weeks has been smoke and mirrors anyway. so you know, this is just another day of the same things. and i think you're right. the normal person, the people who look at their paycheck, every week, every two weeks, every month, they will know who the problem child is and it is not the senate. it is not congress.
it is the lack of true leadership of the president's. gerri: gerri: yes, you said that earlier. rich edson, we have been waiting for this all day long. we had cameras at the white house watching people exit. do you think this comes as a disappointment to most people? the resolution of today and of that meeting? were leaving something good can come from a? >> i think after you hear from leadership and the president, when you got the first reports, the administration officials have basically put on the table what he had been reiterating last week in his speech. what was basically what he had put on throughout the entire campaign. just deal down version. it didn't look all that good. but asou now have this assignment for the senate leaders to get together and hamm something out, on a scale that we have been talking about right now, this is the only shot we have to avoid the fiscal
cliff. the fact that they are giving it another shot over the next 48 hours, it is probably as good of a result from the meeting as you could've expected. gerri: i love ending on an optimistic note. that is definitely good news. i would like to thank all my guests are you think you all for your fine analysis and thank you for your help tonight. i really appreciate it. >> thank you. >> happy new year. gerri: how would you describe today's closed-door fiscal cliff meeting between the president and congressional leaders? do you believe it was a political stunt or real negotiation? la mancha gerriwillis.com, vote on the right-hand side of the screen, i will share the results of the end of the show. still ahead tonight, it's not just the fiscal cliff mess that congress has left undone. there is a whole lot of other work that our lawmakers should have done this year but did not. i will tell you all about it. and we will be right back
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gerri: president obama calling on congress to act to avoid the fiscal cliff. the president said he is optimistic. modestly optimistic, that is, that a deal can be done. here is the president. >> i still want to get this done. it's the right thing to do for our families and our businesses and for our entire economy. but for immediate action comedy hour is here. it is now. we are now at the point where in just four days, every american's tax rates are scheduled to go up by law. every american paycheck will get considerably smaller. that would be the wrong thing to do. gerri: no kidding.
we have been telling you that for weeks. democrats and republicans alike should rename their parties the procrastination party. that is because like a lot of college freshman, they left their work until the last minute. including the 800 billion-dollar fiscal cliff that we have been talking about. a hundred billion dollars it hasn't happened yet. it's not like the deadline comes as a surprise to anybody at all, the least of all congress. they were the ones who extended the bush tax cuts. originally passed back in 20,122,010 and 2012. for two years now, they have known the issue is looming and they chose to do nothing about it at all. but that is not the only thing that this lame-duck congress has to do for the end of the year. the farm bill passed last summer to help farmers hit by the drought has to be extended.
into the next year, it must pass. if they do nothing, a gallon of milk go up $6 a gallon. it sure isn't going toelp consumers. then there are restrictions on u.s. exporters, lower tariffs in good deal for them. awaiting the attention of lawmakers and again, they are not even paying any attention. and today, they are threatening to do sometng with the hurricane sandy relief bill. the hurry up and get it done attitude of small-business owners. a 9-foot wave of flood water hit
her store. she has picked up the pieces and opened her doors for busins. despite losing all her equipment and furnishings, her innsurance denied her claim and she got no help from the government. take a look at this. they got her back in the business. it's pretty awesome, right? the party of procrastination can take a lesson from the small-business owner in staten island, new york. congress has nothing to show for itself after two years. coming up next, how the massive gains in the fiscal cliff could impact your 401k and the economy. stay with us
studies at the cato institute. i would like to show people what we're talking about. he gets confusing for people. we have a current tax rate, 15%. on january 1, the capital gains tax rate will jump to 23.8%. i talked to a lot of my friends and they say that's not a big dumb. what you say? >> it is a big jump. if you add state taxes on top of that, the united states will be up to 20%. our major trading partners, britain and europe and canada -- they are only 16%. so there is a very good reason why just about every industrial country has a really low capital gains tax rate. that's because policymakers just about everywhere know that low capital gains tax rates are crucial for a growth of economy and entrepreneurship and high-technology industries.
gerri: so what if we compare favorably with a lot of developed countries out there -- what would be the practical effect? >> it will slow the flow of venture capital and investment for high-technology companies. if you think about every mjor high-tech company like apple or microsoft or ebay or amazon, they were all nurtured by high income people putting money in early on to these startup companies. we dramatically cut the capital gains tax rate from 40% to 20% before, so what we are going to do is kill america's entrepreneurial economy.
gerri: let's get into the details of this. why you would want to keep these capital gains taxes low. you say it is an issue of double taxation. >> that's right. corporate profits are taxed at the corporate level. and they are taxed again at the individual level. with the dividend and catal gains taxes. george bush, to his credit, tried to do something about that and he chopped the dividend and capital gains tax down to 15%. the effect of that was to reduce the incentive for corporations to take on too much debt. if you tax equity too much, corporations take on too much debt. then it's more likely that they become bankrupt and to destabilize the whole system. gerri: you talk a little bit about competitiveness. let's detail that. low capital gains is important to our nation's competitiveness. but also, to the cmpetitiveness of these companies that we are talking about. >> absolutely. let's say that you are a young indian or chinese entrepreneur with a science degree or engineering degree and you graduate from mit. you want to start a high-tech
company. would you started in the united states, where you're getting from your company years down the road will be taxed at 30%, or would you started in china or india where the capital gains tax rate is zero? many of our major partners have zero capital gains tax rates. if you are an entrepreneur or an investment and growth company, you would rather put your money there than in the united states in the future, which is really unfortunate. gerri: okay, let's talk about companies a little bit here. these tax rates are critical to growing companies. >> that's absoluty right. apple and microsoft, for example, benefited early on from high income individuals pumping and a few hundred thousand dollars to help those companies get started and grow. those high income people could alternatively put their money in and say tax-free muni bonds. if we raise the capital gains tax rates, which people are going to say, i'd ther put my money in state muni bonds. i'm not i am not going to fund these risky growth companies,
which would be terrible for the overall economy. gerri: i think your best argument is lower capital gains means more jobs. i think that is appealing to everybody. but i have to ask you one final question. it seems like we really want to punish success in this country. if you're doing well, working hard, making money, maybe you have a great product -- then it's up to you to bankroll this country's operations. what do you say that? >> absolutely. the entreeneurs are willing to take the risk, the high income individuals willing to take the risk on these risky startup companies, we are hitting these people and penalizing them rather than seeing a favorable environment for capital to have long-term economic growth we want thank you for coming on tonight, great stuff.
gerri: some good news, mortgage rates this year were the lowest they have been in 60 years. unbelievable. thirty year fixed mortgage fell. it if l.a. 3.14%. freddy mac's reported 3.35%. even that is not the lowest we have seen this year. but it sure is close. that sounds like opportunity to me. the northeast is threatened to be slammed by another winter storm. we will be right back.
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gerri: giving you a quick recap of our top story tonight, president oama speaking just moments ago. in that immediate action is needed to avert falling off the fiscal cliff. he says that he is optimistic for an agreement, but neither republicans or democrats will get 100% of what they want. earlier today, the president met with congressional leaders at the white house. a closed-door meeting, here is what the president said just a short time ago. >> we are gog to construct a discussion with senate and house leadership of how to prevent this tax hike on the middle class. i am optimistic that we may still be able to reach an agreement that can pass both houses in time. senator reid and senator mcconnell are working on such an agreement as we speak we want congress taking up that issue
now. in the meantime, the war on tracking, lisa jackson announced her plan to quit january 31. leading to questions as to who obama will choose to replace her. taking a morerealistic approach. let sk john hiatt meister. >> with us tonight we go to john hiatt meister. we want to focus on tracking. do you think a new epa chief old crackdown on tracking? or will they move ahead with that? >> i think we will see a determined effort.
the president wants to federalize the rules on tracking. taking the ultimate responsibility where it currently sits, turn it over to the federal government, and that becomes a wet blanket that is an assertion into the power structure that we just don't need in this country. gerri: the federal government hasn't said which one to do yet. before lisa jackson left her job, here's what she had to say. >> i will read it to you, actually. we have that? gerri: tracking is perfectly
capable of being queen, she says. it requires smart regulations, smart rules of the road. so it sounds like she is not outlawing it altogether. on one hand, but on the other hand, we have seen what happens to the war on coal. if the obama administration came out all guns blazing. is that why do you think there will be a war against cracking? >> when they set their own definition of what smart regulation is, yes, they will set smart regulation at a level that makes it virtually impossible. that is what has happened in the coal mines in west virginia and kentucky, where new permits have come to a screeching halt for four years. what would happen with tracking is that when the states lose control to the federal government they throw their
hands. then you are waiting for a federal regulator in washington dc or some regional office to decide on the geology that is peculiar to a particular state. that is why the state should have the final say over cracking. gerri: i think that tracking has really led to an energy rest of renaissance in this country. that is exactly where we wanted to go, and now, it is really entering the public lexicon. matt damon is out with a movie on fracking, he was on letterman last night about that movie out today. >> you know, it's tough when you go into these communities. the first thing we were shooting
a crazy way of hanging onto way of life that they might lose otherwise. >> it's very tough. gerri: hasn't this been unlocking an economic juggernaut? for so many families across the country? >> it can revitalize the entire economy. we could be on the wave of new prosperity for everyday people. not as rich people. everyday people. because of the job creation potential of domestic energy resources. we turn natural gas into transportation fuel, what a deal that would be. tell the opec nation that we don't want your oil anymore. we are producing methanol or gasoline from natural gas. we are going to keep the money in this country, invested over and over again, create jobs and counties that haven't seen job
creation in decades to end this would just multiply. on top of that, it's not just drillers who succeed landowners. it is the people who make the equipment. we have such a boom opportunity here that it would be shameful for hollywood set the wrong impression in people's minds at the facts do not bear up under the hollywood interpretation. gerri: let's be clear. pennsylvania, ohio, you look across the region are it a real renaissance for the first time for areas where people were just desperate for some kind of economic jolt. here they have it. they have it from their own soil, right from their backyard. epa is going to step in here. we will see what happens. thank you for coming on tonight. happy new year to you. >> thank you and happy new year to you as well. gerri: thank you so much.
welcome to the northeast is bracing for another winter storm. there could be as much as 6 inches of snow in northern new jersey and southern counties in new york. we haven't seen any of that, have we? is expected to hit late tonight and tomorrow morning. boston and philadelphia and parts of connecticut could see up to 4 inches of snow. the storm will move quickly and be gone by sunday. coming up next, a shiny new iphone-5 and what to do with your old smartphone if you have a new one that you got for christmas. coming up later in the show, if you thought luxury cars were safe, you want to hear this story. shocking details of the reports. some juice!
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gerri: if you are looking to upgrade your smart phone, we have tips about how to make money and protect personal data. a ceo joins me now, sergio, it's great to have you. >> thank you for having me. gerri: okay, how much money can you make? >> you try to sell -- if you are going to buy an iphone-5, you're probably in the contract. if you actually have an iphone 4-s, you can sell the 4-s for about $480. gerri: are you kidding me? a routine that much value? >> yes, they do. gerri: let's talk about the models that are best to sell. i assume that $100 or $280 is
not what everyone gets on every model. which model do you suffer the most. you get a lot of money for the newer versions, but it depends on where you are. blackberries are not touching a lot of money, but it is still prominent outside the u.s. you can get pretty good money for them if you get the android phones, some of the newer ones. there are over 400 models of smart phones. gerri: is crazy. and everyone is stealing these apple iphone is. it is amazing to me. let's go through tips on selling them. you said shop around, where do you shop around? >> when you do it at u-sell, you get anywhere from 10 or 15 offers for and what you do is conglomerate all of these offers. we have about 25 partners.
we are probably going to have about 50 by the middle of next year. then you can get all kinds of offers. gerri: is there anywhere else you can go? >> you can go on ebay and craigslist. [talking over each other] >> you will get the money, but it is for market makers. gerri: you say pay attention to condition criteria. >> you need to pay attention to the exact condition of the phone. the price is always the less it's banged up. gerri: you said trade early
because the earlier you trade, the more you get, is that right? >> you know, it reduces and value as time passes. gerri: what are the common mistakes? >> the first is shop around. and then another mistake people make is they don't sell it. gerri: is like a gift card you forget years that's exactly right. so get rid of it right away. gerri: we preciate your time. the name of your website is u-sell.com. >> that's right. u-sell.com. gerri: you must come back again. thank you so much for your advice. luxury cars at 113 this holidays
highway safety, the latest 2013 luxury cars were beatified midpriced family cars for safety. only 27% off luxury cars ranked good in terms of safety. compare that with 72%. unbelievable. here to help is the managing editor of scott trade. what is going on here? >> well, what you see a lot of safety technologies introduced pretty early. much before the lesser expensive cars get better and that the technologies like protecting you in the crash, they are designed to keep you out of a crash rate these technologies are great, but once you're in the crash, you're stuck with what's going on with the older designs, possibly not designed for the
test, that's an issue. gerri: that the one that sounds a little better than i originally thought. the let's go through some examples. the devil is in the details here. for safety reasons for luxury cars starting with the mercedes-benz c and the audi a-4, which is what i have. >> before they introduce this test, they were designed lik all manufacturers do, for the current test at the time. it wasn't part of their protocol for designing, and then the problem is they have a lot of intrusion, small cars, so there's not really a lot of space for things to go and the airbags deploy in some cases. gerri: that's just not good. that is inexcusable. looking at a couple of other cars, the acura tl and the whole
low? >> volvo 560. >> okay, moving on to the acura tl and the volvo 560. >> okay, because of the size and positioning, they were allowed to keep the dummy in the right spot. one thing you want to look at is the honda accord and it was designed for that test. that is key. gerri: all right, we think about the previous hybrid? >> they had a problem with the
formation. a lot of parts coming back towards the driver. with the airbag not functioning at the right time, swaying from side to side, it is surprising that the camera, with the newer design, did not do as well. gerri: this is disappointing across the board. i'm shopping for a car, i want something that looks nice, but i have to have something that keeps my family say. what should we pay attention to, and how can we find the? >> what you are seeing is that they didn't necessarily do well in this one test. but ovall, a lot of them build -- still got good scores. don't go for something that has
been finalized for 2013, you want something that would have the newest production date on the newest and the latest designs for this test, as well as the design for the governments testas well. gerri: thank you for your help tonight. we really appreciate it. happy new year. happy new year. gerri: happy new year we will be [ male announcer ] at scottrade, we believe the more you know, the better you trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have e information you want when you need it. it's anothereason more investors are saying... [ all ] i with scottrade.